Pennsylvania’s prospects for becoming the fourth US state to legalize various forms of online gambling remain strong, despite a mild setback in recent days when the state’s Senate decided not to directly adopt legalization language that was incorporated into the state’s annual fiscal spending bill. As a result, a vote on the legalization measure has been pushed back to September, when the state’s legislature begins its fall session.

Optimism ran high that Pennsylvania would soon become that fourth fully-regulated US online-poker state in the last week of June, following the passage of a detailed amendment authored by Pennsylvania State Representative John Payne.  Payne’s amendment — actually an independent bill reframed for insertion into the budget measure — cleared a House vote by a comfortable margin after being separated from some other gambling-related budget proposals also being considered.

Yet the matter didn’t clear the state’s Senate as easily as its proponents had hoped, even though the opinions emanating from the state’s political watchers is that the online-gambling bill still will… just with a little more tweaking, and only as part of a special budget-balancing revenue patch still being hammered out by the state’s politicians.

Though the politicians involved remain optimistic, the key to the whole process now boils down to whether the $100 million annually that Pennsylvania believes the expansion into online gambling will produce is absolutely vital to balancing the state’s budget. Pennsylvania’s state constitution mandates a balanced budget, and the majority of that was taken care of in an initial $31 billion omnibus measure passed and signed last month.

Yet that bill, allowed to go through despite remaining areas of debate, didn’t quite balance the budget, as mandated.  Instead it left a small hole, about $1.3 billion, to be plugged by various forms of “sin” and usage taxes, new forms of revenue, and even a short-term, one-time loan of $200 million from Pennsylvania’s over-funded medical-malpractice fund.  All this combines with some of the usual partisan-politics stuff, such as Pennsylvania Governor Tom Wolf’s ongoing “no tax increases” pledge.

Oddly, that last subtlety actually works in favor of the online-gambling push.  At first, that $100 million was generally described in negotiations as being generated by an unspecified gambling expansion, which left open the possibility that the money could be raised by a tax hike on revenue generated by the state’s existing land-based casinos.  Such a hike would have jumped that rate fro 12% to 14%.

However, subsequent clarification from Senate leaders involved in the budget negotiations has confirmed that the $100 placeholder window is designated to be filled by potential online-gambling revenue.  Thus, no tax hike would be involved; it’s just an expansion of the 12% rate (or its comparable online equivalent) across a new online marketplace.

However, some changes are certainly be planned for the online-gambling bill, according to Pennsylvania State Senator Pat Browne (R-Lehigh).  Browne, the chairman of the Senate Appropriations Committee, is among the key Senate figures who has indicated that the online-gambling language will eventually pass, but only after certain changes have been made.

One possible change is the decoupling of the online-gambling aspects of Payne’s original amendment from another expansion that was spliced in, one which would have allowed the installation of slot machines at select other locations in Pennsylvania outside of the handful of casinos where it is now available, such as airports.  Payne’s measure already survived the attempted attachment of a “poison pill” by the state’s tavern industry, which earlier sought to include language also allowing video slots to be legalized for use in bars across the state.

The upshot is that the prospects for near-term passage remain good, even if it’s probably not quite the slam-dunk proposition that online gambling’s backers in the state currently assert.  Various forms of opposition remain to the proposed online-gambling and online-poker, most notably from two of the state’s existing casinos: Sands Bethlehem, the Pennsylvania outlet of anti-online-gambling casino owner Sheldon Adelson; and the Parx Casino, located outside Philadelphia.  All other casino properties in the state are either strongly for the online expansion or remain neutral.

Adelson, in particular, is likely to launch a last-ditch lobbying and smearing effort designed to derail the online-gambling expansion plans.  He’s already purchased the cooperation of several politicians, and has funded misleading surveys and smear-tactic ad campaigns designed to derail the online momentum.  With this latest budget patch now due to be firmed up in September, it’s likely that Adelson’s minions will be gathered for one last anti-online lobbying push.

We’ll know the answer soon enough.  There’s no immediate rush for the budget patch that includes the online-gambling expansion language to be passed.  However, Pennsylvania State Senate leaders have indicated that the final pat of the state’s budget framework is a high priority, to be dealt with in September when the state’s legislature reconvenes.  Should it pass, and the be signed into law by Gov. Wolf, then 2017 could bring the first regulated online poker to the state of Pennsylvania.